29.05.2010

Politics & the Nation

• Maoists strike again, 71 killed in train crash
• Maoists once again unleashed their bloody campaign against innocent civilians, derailing a passenger train in West Bengal early on Friday that killed at least 71 people and injured 150. They struck even as the hapless passengers slept, stealthily ensuring that the Howrah-Kurla Gyaneshwari Express passed over an undone track. The ferocity of the impact, being blamed on missing fish-plates, ensured not only the derailment of 13 coaches but also a subsequent collision with a goods train, thus maximising casualty.
• Though attacks on trains are not new for the Maoists, the central motive so far was to garner high publicity and cause large-scale public inconvenience than to inflict casualty. The attack appears to be part of a new lethal strategy of the Maoists to hit at infrastructure and connectivity, even at the cost of civilian lives. They did succeed to an extent on Friday: there is talk of suspending night train services through the Maoist-infested areas, spread over five states, and ensuring stricter compliance of the speed limits prescribed for trains negotiating these stretches.
• The latest attack is also timed in the middle of the ongoing tactical counteroffensive launched by the Maoists on April 15, 2010. The Naxalites undertake this tactical counter-offensive over three months every year, basically to assert their nuisance value and dominance ahead of the lull that sets in during the monsoon. Ironically, most of the high-casualty Naxalites attacks have come during this offensive, including the recent killing of 35 civilians and SPOs in an attack on a passenger bus in Dantewada.

Finance & Economy

• On why the RBI's intervention to boost liquidity is wrong
• The RBI has announced special measures -- additional support up to 0.5% of banks’ net demand and time liabilities and waiver for not maintaining the mandatory 25% statutory liquidity ratio (SLR) -- to boost liquidity in the wake of the transient liquidity crunch that is expected to result out of the payments to be made by the successful 3G bidders and advance tax payments. Is such an intervention correct? ET gives its reasons as to why it is bad:
• Intervention sends a wrong signal; it suggests the RBI is a soft touch and if there is a pressure on funds in future as well, there will be pressure on the central bank to come to the rescue. Easy availability of funds is also likely to make banks complacent about their asset-liability management and, more dangerously, encourage them to finance those who have won bids regardless of creditworthiness and commercial viability. The RBI’s intervention should be limited to situations where the imbalance between demand and supply is structural, not due to transient factors. Central banks need to look at the larger macro picture, not get carried away by temporary ups and downs.
• On how should SEBI work
• This is a very good piece that is written by a former Executive Director of BSE.
• He identifies vanishing companies, fraud, manipulation, IPO scam, source of funds, compensation from investor protection fund as the broad areas for SEBI's working. An interesting essay. A must read.
• IOC posts robust results
• India's largest fuel retailer IndianOil Corporation (IOC) has reported a 247% jump in its net profit at Rs 10,220 crore for 2009-10 despite absorbing Rs 3,159-crore revenue loss on account of selling cooking fuel below cost.
• This performance comes on the back of better refinery margins and higher capacity utilisation.
• The company’s total turnover (including excise duty) for 2009-10 was Rs 2,71,074 crore. The overall petroleum products consumption in the country grew at 3.4% during the year, IOC managed to notch up a growth of 4.6%, registering a sales volume of 63.7 million tonne.
• The company’s revenue loss of Rs 7,548 crore for selling petrol and diesel below cost was fully compensated through an upstream discount as per a subsidy-sharing formula for 2009-10.
• But the government did not fully compensate its revenue loss on account of selling cooking fuel. It received a compensation of Rs 15,172 crore for selling cooking gas and kerosene below cost which was Rs 3,159 crore less than the total loss.
• IOC is losing Rs 105 crore in revenues everyday on selling fuel below cost. The under-recovery (revenue loss) on petrol is Rs 5.06 a litre, Rs 5.31 a litre on diesel, Rs 18.80 a litre on kerosene and Rs 254.37 per LPG cylinder.
• Should our tax code have provisions empowering the tax man to override the provisions in a bilateral treaty?
• Take a look at this interesting news story which is telling us about how such a provision is being dropped from the DTC.
• When countries like US have it -- albeit putting them to use only sparingly -- what is wrong in our tax code having such a thing?
• It is a highly debatable issue. Think about it.

Sport

• Day 6 action from Roland Garros
• Roger Federer and Rafael Nadal set the winning example. The elite pair led a sweep of the top five with Federer into the fourth round and Nadal one behind in the third.
• Andy Murray overcame a third set lapse where he won just 10 points, to roll Marcos Baghdatis 6-2, 6-3, 0-6, 6-2. Fifth-seed Robin Soderling beat Spain’s Albert Montanes 6-4, 7-5, 2-6, 6-3.
• Australian grinder Lleyton Hewitt put in a five-set performance to oust Denis Istomin of Uzbekistan 1-6, 6-3, 6-4, 2-6, 6-2 for a third round spot against Nadal.
• On the women’s side, Serena and Venus Williams also followed the winning script, with Serena winning her second round match over Julia Georges 6-1, 6-1 and number two Venus reaching fourth round with a 6-3, 6-4 defeat of Dominika Cibulkova.
• Elena Dementieva outlasted Canadian Aleksandra Wozniak 6-7 (2-7), 6-3, 6-4, while Maria Kirilenko upset defending champion Svetlana Kuznetsova 6-3, 2-6, 6-4.

Language Lessons

• incipient: Adjective
• Only partly in existence; imperfectly formed
• eg: From close to Rs 50,000 crore on May 21, 2010, the concluding day of the 3G auction, the amount deposited through the reverse repo window had come down to about Rs 6,000 crore by May 26, suggesting some incipient pressure on liquidity.
• flounce
• Verb: walk emphatically
• Noun: A strip of pleated material used as a decoration or a trim; The act of walking with exaggerated jerky motions
• scuttlebutt: Noun
• A report (often malicious) about the behaviour of other people
  
• eg: Of course, there is no reason to aver that Venus Williams’ supposedly diaphanous corset and flouncy tutu-like miniskirt, teamed with near-invisible flesh-toned Lycra underwear, had anything to do with her straight set victory over her Spanish opponent at the French Open in Paris, but it did make her the subject of needless scuttlebutt.